Clubs do not make as much from shirt sales as many think.
Each summer, there will be claims that clubs can finance big-money transfers based on jersey sales alone.
In 2018, there were reports that Juventus would make their money back on Cristiano Ronaldo’s transfer through jersey sales.
If Lionel Messi joins Manchester City this summer, there will undoubtedly be similar claims.
While, back in 2003, there were reports that Real Madrid recouped their transfer fee for David Beckham through sales of the player’s replica jersey.
However, it is an urban legend, and clubs do not make a lot of money, in relative terms, from shirt sales.
Sportswear manufacturers – such as Nike, Adidas and Puma – get the lion’s share of the money spent on replica jerseys.
How jersey sales work
For example, clubs traditionally receive just 7.5 per cent commission from the sale of a replica jersey and other merchandise.
Liverpool, under the terms of their new deal with Nike, receive 20 per cent commission per shirt or piece of merchandise sold.
The Reds receive more commission than any other Premier League club.
Let’s say, for example, a club sells 300,000 replica versions of a player’s jersey in a season. If the jersey was sold for €90 each, which is the price of the new Liverpool home jersey, it would bring in a total figure of €27m, of which a club would traditionally receive a commission of 7.5 per cent.
So, the club would receive just over €2m in commission for the sales of this player’s jersey.
While this is a lot of money, it wouldn’t be enough to finance a transfer for Messi or Ronaldo or any other superstar. In fact, it would probably cover Messi’s current wage for two weeks, and Ronaldo’s for a month.
Selling jerseys wouldn’t be enough to finance transfers even at the higher rate of 20 per cent that Liverpool have with Nike. If 300,000 jerseys were sold at €90 each, it would raise a total figure of €27m. At the 20 per cent rate, Liverpool would receive €5.4m.
So, Liverpool would have to sell roughly 75,000 new replica shirts each week to fund Lionel Messi’s wages, and roughly three million a season.
Juventus reportedly sold 500,000 Cristiano Ronaldo jerseys in the 2018/19 season after they signed the forward from Real Madrid.
While Manchester United sold three million replica jerseys in total in the 2015/16 season.
Nature of jersey deals
It appears that many fans and commentators have a skewed idea of the nature of the deals between clubs and sports manufacturers.
“Kit deals are not traditional sponsorship deals – they are licensing deals, which enable the kit manufacturers to use the club’s brand to sell branded apparel,” Jake Cohen, a sports lawyer, told the Independent in 2018.
Clubs do not have the infrastructure on anywhere near the same scale as sports manufacturers to distribute merchandise. Instead, clubs make money through licensing agreements with the manufacturer. And the big clubs are paid an annual fee for it.
Manchester United receive up to £75 million per year from Adidas. Barcelona earn over £100m a season from Nike and Real Madrid get £85.6m from Adidas.
Liverpool reportedly get £70m a season from Nike under the terms of their new deal. The Reds also receive added bonuses for winning the Champions League or the Premier League.
However, shirt sales alone wouldn’t be enough to fund a transfer.
Originally published on August 8, 2020.